Canada Inc v Sovereign Finance Holdings Limited & Ors
[2024] EWHC 2170 (Comm)
Madison Pacific Trust Limited v Sergiy Mykolayovch Groza & Anor
8 February 2024
[2024] EWHC 267 (Comm)
High Court
A company sued two people who guaranteed its loans. The company got a court order freezing their assets to make sure they could pay if they lost. The two people tried to get the freeze lifted, saying they had enough other assets to cover the debt and the company hadn't been entirely honest. The judge ruled that there was a real risk the two people would hide their money and kept the freeze in place.
Key Facts
- •Madison Pacific Trust Limited (Madison) acted as Facility Agent and International Security Trustee for loans to GN Terminal Enterprises Ltd (GNT), a Cypriot company.
- •Defendants Groza and Naumenko are ultimate beneficial owners of GNT and guarantors under the loans.
- •GNT defaulted on the loans, leading Madison to initiate LCIA arbitration.
- •A worldwide freezing order (WFO) was granted against the Defendants, which they sought to set aside.
- •Madison alleged a real risk of dissipation of assets by the Defendants, citing various asset transfers and attempts to conceal information.
- •The Defendants argued that Madison was over-secured and that the WFO was unjust and inconvenient.
- •The Defendants also alleged material non-disclosure in Madison's without notice application for the WFO.
Legal Principles
Principles for establishing a real risk of dissipation in freezing order applications.
Lakatamia Shipping Co Ltd v Morimoto [2019] EWCA Civ 2203; Fundo Soberano de Angola v dos Santos [2018] EWHC 2199 (Comm)
Duty of full and frank disclosure in without notice applications for freezing orders.
Konamaneni v Rolls Royce Industrial Power (India) Ltd [2002] 1 WLR 1269; Brink's Mat Ltd v Elcombe [1988] 1 WLR 1350; MRG (Japan) Ltd v Engelhard Metals Japan Ltd [2003] EWHC 3418 (Comm); OJSC ANK Yugraneft v Sibir Energy [2008] EWHC 2614 (Ch); The Public Institution for Social Security v Amouzegar [2020] EWHC 122 (Comm); Bracken Partners Ltd. v Gutteridge (2001)
Outcomes
The WFO against the Defendants was maintained.
The court found sufficient evidence of a real risk of dissipation of assets, including asset transfers and attempts to conceal information, outweighing the Defendants' arguments of over-securedness and non-disclosure.
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